Special 457 3-Year Catch-Up - 457(b) Governmental Plans

To determine the amounts for 3-year 457 special catch-up that can be used at City B

A government employee goes to work for City B in 2022 and wants to start making catch-up contributions at 457(b).

Assume that  he meets the NRA rules as defined in the at City B, Assume he can provide all the documentation from City A to City B

He has underutilized amounts from City A prior to 2022 - let's just 2002-2022. He never really used the three-year catch up at City A anyway so it is true underutilized - no double dipping.

Question:  Can he use his underutilized amounts from City A 457(b) be used at City B

Question: confirm this is a code specific interpretation and not something specific to plan provisions

Citing the 457 code would be helpful.  It appears that underutilized amounts are individual to the participant and a personal limit that can be carried from employer to employer.  the catch-up can only be used once per employer  but the underutilized amounts is not specific to the City B contribution history but to the City A contribution history as well 

You're on the right track, MS. See Treas. Reg. 1.457-5(b). Also, see Section 3.4 of the model 457(b) plan language that IRS provided in Rev. Proc. 2004-56, which would require the participant in question to provide the administrator of Plan B with information regarding the individual's participation in Plan A:

After you read Luke Bailey’s good guidance, including the § 1.457-4 and § 1.457-5 rules:

You asked whether “this is a code[-]specific interpretation and not something specific to plan provisions[.]”

Internal Revenue Code of 1986 § 457(b)-(e) and the Treasury department’s rules to interpret IRC § 457 describe outer limits on what a plan may provide within Federal income tax treatment as a § 457(b) eligible deferred compensation plan.

In my 38 years’ experience with governmental plans in all 50+ States, many (but not all) State or local government employers allow payroll deferrals as much as Federal tax law permits.

But some plans do not allow § 457(b)(3) deferrals, and some plans allow some § 457(b)(3) deferrals but with more restraint than Federal tax law requires. While this was uncommon in the 1970s, 1980s, and 1990s, it has happened a little more often after the Economic Growth and Tax Reconciliation Relief Act of 2001 led to a somewhat wider array of service providers for some kinds of governmental plans.

Also, an employer, the participant, or a service provider might evaluate exactly which three of the participant’s tax years are her § 457(b)(3) years. A carefully written plan might allow a participant maximum flexibility to choose her § 457(b)(3) years. But on this point many governmental § 457(b)(3) plans’ documents state provisions more restrictive or burdensome than is needed to make a plan tax-eligible. Among other points, plans differ considerably about how a participant elects her hypothetical normal retirement age that determines which years are her § 457(b)(3) years.

MS, depending on your client’s role and other aspects of the context and particular circumstances, consider whether you should or need not read one or more plan documents of City A, one or more plan documents of City B, and one or more plan documents of State X.